Rich dad poor dad book which is personal finance in self improvement book published in 1997 is called as one of the best personal finance book in the world and
it is so much popular that more than 40 million copies of the book have been sold worldwide and the book has been translated into 40 different languages in 40 different countries worldwide and
this book is still the best sellers in many categories including finance and family and relationships in Amazon.
I have also read this amazing book.
But many people have this idea that whether this book is really worth reading or is it outdated and what you will gain after reading this book.
So in this blog I will review the rich dad poor dad book and see benefits and drawbacks of reading this book to see whether this book is worth your efforts of reading or not.
So let’s get started.
Advantages and disadvantages of reading a rich dad poor dad book.
Advantages
1. It is a story which is easy to read
The main advantage of reading this book is that even though it is more than 300 pages long it is very easy to read because it has many multiple chapters and
it has lots of stories to explain every single idea in detail and in general it is like a story of two dads, one who is richer and
the other one is poor and the author who is the Robert kiyosaki born to the poor dad will learn important lessons about becoming rich from the rich dad who is the dad of the author’s friend.
2. It explains the difference between rich & poor clearly
The main highlight of this book is that it really explains the difference between the mindset of rich and poor and also the lifestyle.
The author does not hesitate to answer the most important question of everybody on how they can become rich in very simple words.
The author explains that the rich get richer because they purchase assets compared to poor who only buy liabilities.
Here you need to learn what assets mean, assets are basically things that help you make money and increase in value over a period of time for example gold, stocks of a company and any business or any intellectual property like patents,
royalties that you own or even real estate business which can help you make more money by itself where as liabilities are things that degrade in value over time like purchasing cars or other luxurious items like accessories, gadgets etc.
The author emphasizes the readers to invest their money more into acquiring assets as the secret of becoming rich.
The author also says that you should save money and invest in purchasing assets and the monthly expenses of your lifestyle should be lower than the amount of money you earn from your assets every month and then you can purchase your luxurious items from the money you generate from assets and this is the opposite thing that poor people do.
The author talks about a strategy called make money work for you rather than you working for it all day long by purchasing the assets.
It is very important to know the difference because there are many millionaires and rich people who do not properly understand the difference and end up bankrupt and also commit suicides due to their poor choices after a couple of years and the author also emphasizes on the difference between being rich and being wealthy and tries to let users focus on being wealthy rather than rich.
The author defines being wealthy as how many days you can survive like not sacrifice on eating food or clothes and shelter and also pay your bills without working and being free.
3. It helps you get a good mindset towards money & financial education
Apart from teaching the importance of learning the difference between assets and liabilities, the author will also give some important piece of advice regarding investing and personal finance like,
- You should not let your emotions control your thinking and choices regarding spending money.
- The author also emphasis on the importance of financial education and financial literacy which is not taught in mainstream schools to children and rich people teach their kids about the importance of assets and financial literacy and saving and properly investing money.
- The author also emphasizes on the importance of learning and gaining knowledge rather than trying to work for money and also urges the readers to work for learning and gaining knowledge not for earning money because at the end of the day if you have knowledge and also right skills which you can gain with knowledge you can definitely earn money and become rich and wealthy because knowledge Is Power.
The author also teaches some important reasons why majority of the people do not achieve financial Independence because of like,
fear of losing money when they acquire as assets like stocks or start their own business or sometimes being lazy and not working hard on their business and getting into bad habits like
getting loans and using credit card and letting their emotion control their thinking and purchasing decisions and
Sometimes arrogance can also be a reason with an attitude of I know everything and not being open minded and many more which you can learn only after you start reading the book.
But if you see rich and wealthy people always learn and gain new knowledge and skills which makes them different from the poor people.
The simplicity of this book is what makes it so popular and best seller in the personal finance category.
4. Benefits of having a business
When we are talking about personal finance and making money and getting wealthy.
The author also explains how you can reduce your taxes and save money with the help of starting your own business.
The author says that starting your own business and corporate company will help you a lot when it comes to reducing the income tax because the income tax of a corporate is going to be much lesser compared to the income tax of the individual and the rich people keep on getting rich because they won’t have to pay much taxes compared to their employees who just work for money as an employee.
Along with that because when you start a business you can experience the real freedom and the real benefit of being wealthy because after sometime you can start hiding other people into the business and you can become free as you can still make money from your business even if you are not working actively on it.
These are all the major advantages of reading this book.
Disadvantages
1. Entrepreneurship focused
One of the main disadvantages I have found with this book is that it too much emphasis on the importance of entrepreneurship and less on jobs.
First of all you should know that not everyone can start their own business and startup because it requires certain skills and qualities to become an entrepreneur like leadership and risk taking ability and also having the right knowledge.
But the author says that the moment you start working for money and get your paycheck you cannot become financially independent but it is not true in complete sense because even if you get your paycheck and control your monthly expenses and
focus on acquiring assets through investing in stock market or you create any intellectual property like patent or create any music or write any book then you can still make money and achieve financial freedom which can take more time compared to starting any business.
This is also what author says in the book that you can also start your own business at the same time you are doing your job by acquiring assets.
So even if your doing your job you don’t have to worry that you can’t become a financially independent person because,
even if it takes more time compared to starting a business you can still become a financially independent person,
depending upon your monthly expenses and your assets portfolio so what you learn is that you should start acquiring assets and stop spending money on liabilities.
2. Too much emphasis on real estate
There is one more small disadvantage of this book which is that the author emphasises more on purchasing real estate properties and he also dedicated a whole chapter to explain the power of real estate and
he also urges the readers to even take debt in order to get into real estate business but it can work for some people and not for others like any other business because the location of the land property will play a huge role and
it can be a subjective thing sometimes and I believe investing in stock market and mutual funds is much better strategy than real estate as just because the author got monetary profits from real estate does not mean that others will also get the same benefit and
you should keep in mind that the book was written in 1997 and times have changed now when it comes to which assets you should purchase because you also have Bitcoin, intellectual property, etc.
But apart from that I have not found many other disadvantages on this book.
After reading all the benefits and drawbacks of reading the book let’s see whether it is worth reading and would I recommend it.
Is rich dad poor dad worth reading?
Absolutely 100% this book is definitely worth reading.
I would rate this book 4/5, if you don’t have the time and energy to read the paper book then you can consider listening to the audiobook on audible.
It is no surprise that this book has been sold more than 40 million copies worldwide and also translated in 40 different languages because it is very simple and straight to the point and
The author tries to question and criticize the mainstream society like educational institutions which do not teach students about personal finance and how they should handle money and give financial education and
the trend of spending money on liabilities like purchasing gadgets, cars to show off but the fact is those liabilities like cars for example lose more than 25% of the value the moment you purchase it and
another disadvantage of such liabilities is that you should still spend money on them to maintain them like cars maintainence or house maintenance, etc but they won’t help you by making you more money because they degrade in their value every year.
All of this ideas and strategies are mind-blowing and eye-opening to majority of the people who new to personal finance especially for teenagers because,
they will have a strong foundation regarding how they should achieve their financial independence although this book does not teach you any step by step direction on how you can make money in a specific category but it will give you a strong foundation for sure.
I have read this book at the age of 17 and reading this book was one of the best decisions I have ever took in my life and the idea of working in order to learn and gain knowledge and skills not to earn money and the concept of assets and liabilities stuck in my head throughout my life.
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Conclusion
These are all the things you need to know about rich dad poor dad book.
You can purchase this book on Amazon for 200 rupees paperback.
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